Is Deere a Value Trap?

Though the stock trades for just 10 times earnings, the farm tractor and equipment maker faces major risks.

Last year, U.S. farmers battled drought. This year, favorable conditions are raising the possibility of record harvests. The corn crop is likely to increase 29% to nearly 14 billion bushels, while soybeans should rise 13% to 3.4 billion bushels, according to the Department of Agriculture.

That would seem to bode well for tractor makers like Deere (ticker: DE), and its shares can be had for an alluring 10 times earnings, making them one-third cheaper than the broad market. But prospective buyers should be aware that Deere...